Tit-for-tat escalates
China announced on Friday that it will implement up to 25 percent tariffs on $60 billion worth of US goods if President Trump follows through with his plan of taxing $200 billion worth of Chinese goods.
The move is the latest in a tit-for-tat standoff between the two countries. Tariffs have been increasing for both countries for months now with no signs of slowing down. China defends its position, “In violation of the bilateral consensus reached after multiple rounds of negotiations, the United States has again unilaterally escalated trade frictions.”
The products that could face tariffs include libations, nuts, meat, furniture, and more. Analysts report that this would affect $170 billion of goods exported to China. However, these tariffs certainly affect China more than the US, as US imports 18 percent of its goods from China, whereas China imports only 8 percent from the US.
Consequently, it will be challenging for China to continue rising tariffs in retaliation for President Trump’s hikes. White House press secretary Sarah Sanders explains, “Instead of retaliating, China should address the longstanding concerns about its unfair trading practices.”
At the same time, because China is the US’s biggest trading partner by a large margin, it cannot necessarily afford to continue raising its tariffs either. A trade war will dismantle not only the US but also the world economy.
However, President Trump seeks to reduce the trade deficit with China, which is why he continues to raise his tariffs. The strategy may work in the end, but it is proving to be more of a bane than a boon for the US economy.
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